Your Econ 201 professor has a daily budget of $40, and he spends it entirely on...

Your Econ 201 professor has a daily budget of $40, and he spends it entirely on coffee and comic books. The table shows the marginal utility he receives from consuming different quantities of coffee and comic books. Each comic book is priced at $8, and each cup of coffee is priced at $4. To maximize his total utility, how many cups of coffee should he buy, and how many comic books should he buy? How many utils of total utility will he enjoy?

Utility from comic book consumption		Utility from coffee consumption		Marginal utility per dollar
Quantity of comic books	Marginal utility from comic books (utils)	Quantity of coffee (cups)	Marginal utility from coffee (utils)	Marginal utility per dollar for comic books	Marginal utility per dollar for coffee
0	0	0	0
1	8	1	1
2	7	2	2
3	6	3	3
4	5	4	5
5	4	5	7
		6	6
		7	5
		8	4
		9	3
		10	2

Expert Solution

Rahul Sunny answered 2 years ago

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